Premier Foods: Q1/2015 Preliminary Results

London / UK. (pf) British Premier Foods PLC announced its preliminary results for the financial period to 04 April 2015, including unaudited pro forma results for the 52 weeks to 04 April 2015. Chief Executive Gavin Darby: «For the last quarter, I am pleased to again report an improving sales trend, which has benefited from a combination of brand investment, exciting new products and strong retail execution. Across our branded portfolio, we have delivered volume and value share gains, while we have driven growth in our cake and flavourings + seasonings categories».

«Over the last twelve months, six of our major brands have benefited from TV advertising and we have launched a number of new products to market, with more to come this year. We have also made good progress with our major customers and we now hold significantly more category captaincy roles than we did three years ago».

«While it is encouraging to note the return of volume growth to both our categories and the wider grocery market, we expect the near term trading environment to be challenging, and our expectations for the year are unchanged. I remain confident that our strategy of investing in brands, innovation and infrastructure is the right one for Premier Foods, and see increasing evidence that our efforts are starting to pay off. The Board is firmly focussed on the creation of future value, and believes that its investment and growth strategies, combined with a focus on cost efficiency, Trading profit delivery and organic de-leveraging, are well positioned to deliver success».

Continuing operations 04 April 2015 (15 months) 31 Dec 2013 (12 months)
Revenue 964.3 million GBP 843.0 million GBP
Trading profit 150.2 million GBP 139.5 million GBP
(Loss) after taxation (92.7) million GBP (46.7) million GBP
Basic loss per share (12.7) Pence (12.8) Pence
Adjusted earnings per share 09.0 Pence 17.0 Pence
Pro forma results (unaudited) 04 April 2015 (52 weeks) 05 April 2014 (52 weeks) Change (%)
Branded sales 683.7 million GBP 712.8 million GBP (4.1%)
Trading profit 131.0 million GBP 139.9 million GBP (6.4%)
Adjusted profit before tax 83.2 million GBP 74.9 million GBP 11.1%
Adjusted earnings per share 08.0 Pence 15.6 Pence (48.9%)

As a result of the Company´s decision to move to a strategic business unit structure, the Company has for the first time been required to assess the carrying value of the Sweet Treats business as a stand alone entity. The goodwill allocated to the business unit has been assessed and consequently, the Company has recognised an impairment of goodwill of 67.9 million GBP in respect of its Sweet Treats business for the financial period ended 04 April 2015. Despite this non-cash charge, the Company considers the Sweet Treats business presents many further opportunities for future growth.

Financial Reporting Changes

  • Move to 52 week reporting period ending early April (previously calendar year to 31 December)
  • Half Year and quarterly updates for 26 weeks and 13 weeks respectively
  • Better fit of financial year end with seasonal nature of business
  • Re-classification of certain commercial costs from selling, marketing + distribution expenses to turnover
  • Prior periods are re-stated to reflect all the above where required
  • Full pro forma P+L results for 52 weeks to 04 April 2015 in appendix

Pro Forma Results

The Company´s results for the 52 weeks ended 04 April 2015 are presented on a Pro forma basis, unless otherwise stated. The Pro forma results are unaudited, exclude the results of previously completed business disposals, joint ventures and are presented to illustrate the performance of the Company on the new reporting calendar methodology. Continuing operations includes the respective periods that the Company maintained ownership of completed disposals in 2013 and joint ventures entered into.

million GBP Continuing operations Less: Disposals Less: JV Knighton Less: 2013-01-01 to 2013-04-06 Add/(Less): 2014-01-01 to 2014-04-05 Pro forma business
Sales 964.3 (0.2) (8.1) N/A (188.6) 767.4
Trading profit 150.2 3.8 0.7 N/A (23.7) 131.0
Ebitda 168.7 3.6 0.7 N/A (28.1) 144.9
Sales 843.0 (6.4) (17.4) (204.5) 188.6 803.3
Trading profit 139.5 (0.6) 0.7 (23.4) 23.7 139.9
Ebitda 156.8 (0.6) (0.3) (27.8) 28.1 156.2

Note: The statutory accounting period is from 01 January 2014 to 04 April 2015. Pro forma results are prepared for the 52 weeks ended 04 April 2015 with comparative period of the 52 weeks ended 05 April 2014 and are unaudited. Trading profit is defined as operating profit before re-financing costs, restructuring costs, profits and losses associated with divestment activity, amortisation and impairment of intangible assets, the revaluation of foreign exchange and other derivative contracts under IAS 39, profits and losses from associate companies and pension administration costs and net interest on the net defined benefit liability. Ebitda is Trading profit excluding depreciation. Adjusted profit before tax is defined as Trading profit less net regular interest. Adjusted earnings per share is defined as Adjusted profit before tax less a notional tax charge of 21.4 percent (2013: 23.25 percent) divided by the weighted average of the number of shares of 731.4/366.1 million. Weighted average number of shares on a 52 week ended 04 April 2015 is 824.4 million. Net regular interest is defined as net finance cost excluding write-off of financing costs, fair value adjustments on interest rate financial instruments and other interest.